A month has gone by since the last earnings report for Icon PLC (ICLR). Shares have lost about 4.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Icon PLC due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

ICON Misses on Q3 Earnings, Lowers 2024 Guidance

ICON plc delivered third-quarter 2024 adjusted earnings per share of $3.35, up 1.5% from the year-ago period’s figure. However, the metric missed the Zacks Consensus Estimate by 12.99%.

The company reported GAAP earnings per share of $2.36, up 19.8% from the year-earlier level.

ICLR’s Q3 Revenues

Total revenues decreased 1.2% year over year to $2.03 billion. The figure was down 1% on a constant currency (CER) basis. The metric missed the Zacks Consensus Estimate by 1.2%.

Gross business wins in the third quarter amounted to $2.83 billion and cancellations totaled $504 million. This resulted in net business wins of $2.33 billion and a book-to-bill of 1.15.

ICLR’s Q3 Margins

The gross profit decreased 2.4% year over year to $594.1 billion. The gross margin contracted 35-basis points (bps) to 29.1%.

Selling, general and administrative expenses rose 10.8% to $205.1 million.

The adjusted operating income was $386.3 million, suggesting a decrease of 8.2% year over year. The adjusted operating margin contracted 144 bps to 19%.

Cash Position

ICON exited the third quarter with cash and cash equivalents of $695.5 million compared with $506.6 million at the end of the second quarter. It had a net debt balance of $2.7 billion at the end of the reported quarter.

Cumulative cash flow provided by operating activities was $948.3 million compared with $720.9 million in the prior-year period.

Guidance

The company lowered its full-year 2024 financial guidance.

It now expects revenues to be in the range of $8.26 - $8.30 billion (down from the previous guidance of $8.45-$8.55 billion), representing growth of approximately 1.7-2.2% year over year. The Zacks Consensus Estimate for the same is pegged at $8.51 billion.

Adjusted earnings per share are anticipated to be in the range of $13.90 - $14.10 (down from the previous guidance of $15.00-$15.20), implying 8.7-10.2% year-over-year growth. The Zacks Consensus Estimate for the metric is pegged at $15.07.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -14.72% due to these changes.

VGM Scores

At this time, Icon PLC has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Icon PLC has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

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